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Price Structuring in Construction Contracts: Advantages and Pitfalls of GMP, Cost-Plus, and Fixed Cost Contracts

Recording of a 90-minute CLE webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Thursday, April 30, 2020

Recorded event now available

or call 1-800-926-7926

This CLE course will examine several distinct versions of AIA construction contracts that attempt to allocate the costs between the contractor and the owner. The panel will explain the advantages and disadvantages of guaranteed maximum price (GMP) agreements, comparing a cost-plus contract with and without a GMP, and a fixed-cost construction contract, while providing counsel on best practices for drafting these agreements.


Construction projects can run smoothly if all key parties to the project, including the owner, architect, contractor, subcontractors, and potentially others, clearly understand any pricing and scope limitations of each party, as most disputes center around these areas.

Construction counsel should work with key partners in any project to determine how best to structure pricing from their client’s perspective--an essential factor in finalizing a deal. Ensuring clearly defined scope of services and crafting well-structured contracts also play a crucial role. There are benefits and drawbacks between various association “form” contracts, and each should be carefully considered to ensure the one selected accomplishes the desired goals.

Although construction industry associations provide standard construction forms, construction counsel should not rely on the standard form alone! Counsel should tailor the contract to the particular needs of the project and parties, carefully negotiating critical provisions, and anticipating common areas of dispute.

Listen as our panel of construction practitioners experienced in routinely negotiating these types of contracts best addresses the ins and outs of these contracts and provides guidance on best practices. The panel will discuss critical clauses to include in the agreements and provide strategies for avoiding common drafting pitfalls and resolving contract disputes.



  1. Overview
  2. Cost-plus (with and without a GMP)
    1. Budgeting
    2. Scheduling
    3. Scope of services
    4. Logistics
  3. Fixed cost
    1. Budgeting
    2. Scheduling
    3. Scope of services
    4. Logistics
  4. Insurance and indemnification
  5. Project changes and delays
  6. Dispute resolution and termination


The panel will review these and other key issues:

  • What are the main types of cost structuring in construction contracts and what distinguishes each form from the others?
  • Is there a best form of price structuring that addresses future scope of service disputes?
  • What factors should construction counsel consider when tailoring a professional association standard form to a particular project?


Brown, Gary
Gary L. Brown

Kelley Kronenberg

Mr. Brown is a Partner in the firm’s Fort Lauderdale office and is the Head of the firm’s Construction...  |  Read More

Garcia, Ray
Ray Garcia

Sr. Attorney
Law Office of Ray Garcia

Mr. Garcia is the senior attorney at the Law Office of Ray Garcia, P.A. He was born in Miami, Florida. Mr. Garcia is a...  |  Read More

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